Village still reaping tax revenue for residents who left

Campton Hills and Kane County lock horns over state funds

A new state law could determine how much shared tax revenue the new village of Campton Hills is entitled to collect from the state. The county says it's collecting part of the county's share.

In the three years since Campton Hills was incorporated, about 1,500 of the original residents have withdrawn hundreds of parcels from its boundaries. Yet, village officials continue to collect tax revenue from the state based on the town's population at incorporation.

Kane County officials say this is unfair, and state lawmakers hope to remedy the issue with a change in law. Village officials estimate the new law could cost the village as much as $150,000 — or about 10 percent of its general fund's annual revenue — and they hope the governor will delay signing the bill until lawmakers can come up with a fair formula for determining population.

Although Campton Hills was formed in 2007 after 55 percent of residents in a 20-square-mile area voted to incorporate, state law permitted groups of landowners who objected to being in the village to disconnect in the first year of the village's life simply by gathering the support of 51 percent of property owners. After the first year, state law requires 100 percent of property owners in a given area to support de-annexation in order to proceed.

Hundreds of parcels have been removed from the town's boundaries, with no change to the village's per capita revenue formula. The village reaps about $100 a year in state shared revenue for each citizen identified in the most recent census.

The new law would effectively bar communities from collecting per capita revenue for people whose properties have disconnected and no longer receive local services.

However, village officials say they are uncertain how to comply with the law, which would require towns to report population changes to the state within 30 days of a land disconnection. It would mandate that Campton Hills figure out how to calculate the number of citizens who reside on properties that have disconnected and reverted to unincorporated Kane County.

Campton Hills Village President Patsy Smith said the legislation requires the village to use census information to report population changes, but census tracts do not follow the same boundaries as disconnections, and some disconnected tracts now contain houses that may have been unoccupied in 2007 and 2008.

"We would like legislators to amend the law to give a formula on how we're supposed to implement this law," she said. "It's impossible to use census data to do that, unless you have a full census tract within a disconnection territory."

Smith said the village plans to notify state officials that it does not know how to comply. However, Village Attorney Bill Braithwaite said that while he does not believe that it is "practical or possible" for the village to implement the bill, "the village will attempt to comply with any valid legislation."

Braithwaite pointed out that while it is fair for Campton Hills to cease receiving state shared revenue for people no longer residing within the village, Campton Hills had provided its citizens with village services for many months after it formed but before a special census was taken that enabled it to receive its full allocation of state revenue.

"It's very easy to jump to the conclusion that this bill is righting a wrong and that the county should get the revenue for a property that has been disconnected and is served by the county, and it's hard to argue with that in some sense," Braithwaite said. "But then you have to look at the fact that when the village was created, there was a substantial hiatus of many, many months before the people were counted for the purposes of getting state-funded revenue. And during that period, who was providing the services? The village was. Meanwhile, the county was getting those state revenues.

"So, in this particular case, Campton Hills did not receive several hundred thousand dollars of revenue that it would rightfully have received for areas that it was taking care of. You can't draw an exact balance between the disconnections and the area that was being served before the village received revenue, but there is a fair amount of inequality in that."

Braithwaite noted that once the 2010 census is certified sometime in 2011, the village's population will reflect an accurate headcount and level of state funding.

"We're hoping maybe the governor will realize that this is a flawed law that needs work," Smith said. "But, we'll adjust. It's just another one of those things we've had to deal with as a new municipality. We're going to hang in there and persevere. It doesn't make our job easy."

Wheaton attorney Tim Elliott, who has represented many landowners who have disconnected from Campton Hills, testified to legislators in favor of the law and called it a "common sense piece of legislation that's designed to send money to the governmental bodies that are actually providing services to residents."

Elliott noted that the law would provide no penalties for municipalities who do not follow the legislation. However, he expressed hope that Campton Hills would do so.

"In these tough economic times, we hope and expect that everyone will comply," Elliott said.